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KIDNEY DIALYSIS: Deal with Indian company puts Bangladesh govt in trap
Emran Hossain | Published: 23:30, Mar 08,2022 | Updated: 23:48, Mar 08,2022
This file photo shows patients needing dialysis and their carers waiting for the resumption of dialysis services that were suspended for hours without prior notice at the National Institute of Kidney Diseases and Urology Hospital at Sher-e-Bangla Nagar in Dhaka on February 02, 2022. -- New Age file photo.
A public private partnership deal over the operation of two kidney dialysis centres in key public health facilities by an Indian company has the Bangladesh government caught in a trap, experts said.
The country’s lone PPP deal that came to implementation stage was undermining the public health sector and an emergency healthcare need of the poor, they said.
The Hyderabad-based Sandor Madicaids continued threatening the government of discontinuing treatment of critically ill kidney patients, after briefly suspending their operations in early February over outstanding bills.
On February 2, Sandor suspended operations at its two dialysis centres at the National Institute of Kidney Diseases and Urology and Chittagong Medical College Hospital for the entire morning session, delaying scheduled dialysis of about 100 patients with renal failure.
A patient with renal failure needs kidney dialysis at least twice a week and a mere delay in getting the treatment could be fatal, let alone its suspension, kidney disease experts said.
‘The company is threatening to stop their operations from time to time,’ said Farid Hossain Miah, director, hospital, Directorate General of Health Services, hoping that it would abide by the contract.
Both the government and Sandor officials blamed each other for misreading the contract. Experts deemed the contract unequal and fraught with opportunities letting the Indian company inflate its profit in return for minimum service.
‘The motivation behind such a deal is clearly to help someone win a highly profitable business opportunity,’ said public health expert Rashid-e-Mahbub.
The Sandor Madicaids, said its officials, won the job of running the two kidney dialysis centres through an international tender by offering dialysis at Tk 2,190.
The price is five times higher than the treatment costs at public facilities in Bangladesh and nearly four times the cost in at least one local private hospital – Gonoshasthaya Kendra - given that the patient is poor.
Anybody can get kidney dialysis at the Kidney Foundation at Tk 1,600. But the price could fluctuate between Tk 4,000 and Tk 8,000 at private hospitals.
In the contract signed in 2015 with Sandor, the government agreed to pay Tk 5.30 crore if the company carried out 19,500 subsidised sessions of dialysis a year – fixing the subsidy for each dialysis at Tk 2,718.
In addition to the subsidy, the contract allowed Sandor to collect Tk 400 from each subsidised patient, pushing the overall price of each subsidised dialysis to Tk 3,118, far higher than what the company itself had wished for.
According to the estimates of Sandor’s finance and accounts manager, Mohammad Nazmul Hasan, the company was guaranteed an income of about Tk 60 crore in 10 years with an investment of Tk 18 crore through subsidised dialysis alone.
The government subsidy and the contribution from each patient will increase by five per cent yearly, the contract said, without clarifying whether or not the monetary transaction is subject to tax and vat or who to pay it.
The DGHS never deducted any tax on Tk 35 crore paid to the company in the five years since it began operations at the end of 2016.
The subsidised sessions of dialysis represented only 15 per cent of the capacity the Indian company was allowed to have with 90 machines operating at the NIKDU and CMCH.
The price of each of the unsubsidised dialysis has been fixed at Tk 2,190, entirely payable by the patient, against an estimated per dialysis cost of Tk 1,880.
The cost of kidney dialysis is highly variable and could be greatly reduced by reusing instruments, widely practised across the globe, up to 100 times in some countries.
Sandor claims it uses fresh instruments for each dialysis.
‘Our business profit has been lowered by the health directorate’s order of increasing subsidised dialysis sessions to 29,609 by the same amount Tk 5.30 crore,’ said Nazmul.
The DGHS said that the tender price at which kidney dialysis was offered in the first place entitles them to exactly 29,609 sessions of dialysis a year for Tk 5.30 crore – no more, no less.
The annual free dialysis sessions, which the contract fixed at 1,950, will also have to be increased as the fixed free dialysis sessions are meant to represent 10 per cent of the total subsidised dialysis sessions, the DGHS said.
‘The contract mentioned nothing about 10pc free dialysis session,’ Nazmul claimed, terming it DGHS’s arbitrary interpretation of the contract.
Sandor officials believe that the contract, prepared for Tk 10 lakh by an international financial institution hired by them, was not even read once by the DGHS.
The DGHS refused to make an official comment on the contract.
But unofficially, officials at the DGHS, who have knowledge on the matter, said that the contract benefitted the Indian company alone and that they did not even have a chance to go through it before signing.
On January 27, 2015, the agreement over the public private partnership was signed in presence of the then health and family welfare minister Mohammad Nasim and his deputy Zahid Maleque.
The then Director General of the DGHS Deen Mohd Noorul Huq signed the agreement on behalf of the government.
Zahid Maleque, the incumbent health minister, could not be reached for comment.
Aminur Rahman Sarkar, a former private company employee based in Dhaka, is representing the company in Bangladesh as a director.
Officials at the DGHS wondered how the government could agree on signing a contract committing that neither the NIKDU nor CMCH shall develop own dialysis centres during the 10 years of tenure of the contract.
Before the Indian company started operating there, the government hospitals used to operate 49 dialysis machines on their own. Many of the machines were out of operations due to poor management and maintenance.
The hospitals currently offer no dialysis service on their own except for scarce academic research.
‘How did such an unequal contract that could leave the government hostage to a business company come through in the first place?’ asked Transparency International Bangladesh executive director Iftekharuzzaman.
‘The government clearly created opportunities to benefit somebody but apparently fell in a trap,’ he said, asking for an investigation against the people involved.
The contract also makes it mandatory for the DGHS to pay the Sandor Madicaids in seven days of the receipt of invoice in default of which the health directorate will be entitled to pay 1 per cent interest daily above bank rate.
The contract allowed the company to use infrastructures such as space, water and electricity for free.
‘PPP investments must be profitable and the government cannot move away from promises made in the contract,’ said Nazmul, asserting their service is internationally competitive and comes at a very cheap price.
Due to the pandemic, the subsidised dialysis sessions conducted by the Sandor rose from 22,000 in 2017 to about 80,000 in 2021 after many hospitals turned Covid dedicated.
In the five years until 2021, Sandor said, it ran 259,676 subsidised sessions of dialysis, including 10,707 free sessions.
The company has the capacity of conducting over 131,000 sessions a year.
‘The contract is replete with signs of being prepared under political pressure and through irregularities and corruption,’ said economist Anu Muhammad.
He argued leaving emergency healthcare such as kidney dialysis to the private sector and that using public resources was suicidal and unacceptable.
Roughly 50,000 people develop kidney and urological diseases in the country every year with 140 local dialysis centres, 20 per cent of them privately owned, operating in the country.
The estimated number of current kidney and urology patients in the country is 20 million with roughly 5,000 new patients needing kidney dialysis every year.
About 80 per cent of kidney patients never even dream of getting treated, kidney diseases experts said.
Some of the local private hospitals have shown the way of how a combination of motivated staff, efficient management and donation could make kidney dialysis accessible to the poor.
The Kidney Foundation, which started with six beds in 2003 offering dialysis at Tk 900, a price far less than the then market cost, grew up to be a 300-bed hospital, mostly on its own and was still offering dialysis at one of the lowest prices.
Gonoshasthaya Kendra founder Zafrullah Chowdhury said that with a government subsidy of Tk 900 per dialysis he could easily increase his daily dialysis capacity by 200 to 500 patients.
‘The government never actually cared whenever we came up with a proposal to improve kidney disease treatment either by training nurses or subsidising existing facilities,’ said Zafrullah.
‘People, exposed to poisonous environment and food, a major cause of kidney diseases, have very limited access to treatment,’ he said, ‘this is mismanagement of an epic proportion.’
Bangladesh govt in trap after PPP deal with Indian firm for Kidney dialysis
A public private partnership deal over the operation of two kidney dialysis centres in key public health facilities by an Indian company has the Bangladesh...
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